OPTIMAL COST OVERRUNS: PROCUREMENT AUCTIONS WITH RENEGOTIATION
نویسندگان
چکیده
منابع مشابه
Common-Value Procurement Auctions with Renegotiation
This note contains the equilibrium bid functions for two types of common-value procurement auctions: 1) a procurement auction in which bids represent an enforceable contract; 2) a procurement auction in which, upon learning the true cost of supplying the good, the winning bidder can renegotiate the contract with the buyer, and each bidder must submit a bond with their bid, which is returned at ...
متن کاملProcurement and Renegotiation
Parties bound by an incomplete contract have an incentive to renegotiate after acquiring new information. The issue of the parties' investment in the relationship before renegotiation is analyzed in a simple two-period procurement model. The firm invests in the first period. It then learns its production cost and the sponsor learns its value for the project. Williamson' s underinvestment presum...
متن کاملOn optimal bidding in sequential procurement auctions
We investigate the problem of optimal bidding for a firm that in each period procures items to meet a random demand by participating in a finite sequence of auctions. We develop a new model for a firm where its item valuation derives from the sale of the acquired items via their demand distribution, sale price, acquisition cost, salvage value and lost sales. We establish monotonicity properties...
متن کاملOptimal Bidding in Sequential Procurement Auctions
We consider the problem of a firm that in each period procures items by participating in auctions and then it sells the acquired items by the end of the period, where any unsold items are salvaged. The objective of the firm is to have a bidding policy that maximizes the expected value of its profit over N auctions. In this model the firm’s valuations derive from the resale of acquired items via...
متن کاملOptimal Procurement Auctions of Divisible Goods with Capacitated Suppliers
The literature on procurement auctions (reverse auctions) typically assumes that the suppliers are uncapacitated (see, e.g. Dasgupta and Spulber, 1990; Ankolekar et al., 2005; Chen, 2004; Che, 1993). Consequently, these auction mechanisms award the contract to a single supplier. We consider a model where suppliers have limited production capacity, and both marginal costs and the production capa...
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ژورنال
عنوان ژورنال: International Economic Review
سال: 2018
ISSN: 0020-6598
DOI: 10.1111/iere.12327